we'll wait and see what those are. p.m.i. in china also missed. below the estimate of 51. at a three-month plosme caroline? >> manus. thank you. no cheers for the world cup from retailer. there is not enough to improve the supermarket performers. the u.s. shoppers are proving lackluster. is there light at the end of the tunnel? ahold tries to paint an optimistic view of future trends. wyle be back with more on the food giant data. >> some french economic data. france p.m.i. comes in at 51.1. the estimate was 50.2. that is the beat on services. manufacturing though the bar was low. 47.8 was the estimate. 46.5 is where p.m.i. nufacturing comes in for

france we're at $1.3262 on the euro come into this number. euro doesn't know what to do with this data. it is mixed at best. >> let's check in on the euro dollar. there is a little bit of a move head of that data. so slightly lower. in terms over the equity markets, let's check in. there was that hawkish tone to the federal reserve, but markets -- the s&p finished almost two points off its records. the dollar was trading at an 11-month high. markets don't seem to be terribly bothered. we'll get you retail sales later

on. equity markets are opening higher. equity is trading higher despite a shift in fed. one thing i have have been saying throughout the morning is the amount of money coming out of these equity markets. u.s., bps pulled almost $1 billion in july. those are the first outflows from this -- in equities since april 2013. redemptions overall on these equity markets were $3.5 billion last month. those are the biggest redemptions in almost two years. does that tell you something about the flow of money into the euro? is that what has caused the draw down? yes, you the euro/dollar trading on strength. because of the appeal for peripheral bond assets and european a equities. those are the questions you to ask yourself. that would tie up quite nicely with the direction in the dax

and the correction you saw in the paris market along with the near correction in the euro stoxx 50. some companies -- caroline will take you through aheld numbers. missed on their target numbers. prepared to spend more money on their online offering. possibly some acquisitions in the states. infineon, the market was unsure perhaps what way to take the news but they are going after a $3 billion bid on rectifier in the states. the market seems to be quite happy with that. all about power chips at the moment. the reason i have rio up there, at the start you had china missing on the purchase managers index. also, i know you get excited by this. iron other is at its lowest -- iron ore is at its lowest point so far this year. that is a fairly big consequence for the likes of rio at this particular timeo opposed to glen

core. >> i check it every time i come in every time at 4:00 a.m. thank you very much, manus cranny. joining me is michael franklin, a chief investment strategist. welcome to the show. >> thank you. >> put it in context, the chinese data which disappointed. second half of the year was meant to be big rebound, wasn't it? the data is not telling that story. >> i think the problem we have is it comes out month to month. you have to take a slightly long-term perspective to get a feel with it. china looking to sort out credit and problems in the property sector. i don't know about expectations for the second half but it ain't happening for some countries. when you look at what's going won the federal reserve, a little bit more hawk niche the minutes yesterday evening.

> it is all noise. you have to try and cut through what the underlying view is. i'll come to this in a moment. i look at the technicals as well as anything else going on. you can see truth and momentum data and how that is moving. for all of these changes month to months, the core market is moving in a certain direction. >> look at the markets. it could repeat. with hindsight we might look at that month and say that was the end of a five-year bull market. >> absolutely. i don't want to come on super bearish. what has developed in the last two months or so is a particular pat innocent the way the ftse is moving. it is not very positive. when you consider all the things that we have to consider in the world at the moment, you know, the geopolitical issues and what's going on with the

underlying economy, you have to separate those out. we just had this last week. some of the issues have appeared to disappear. come out of the frame. you know, the ukraine, russia situation could move back again quite quick lism sent jment fragile. people have money on the table that they built up over five years. end of july we saw the market come off. >> when we talk about another correction, this bull market has legs. you're looking far 15% to 20% correction. >> you'll see from one of the charts i put along the -- if you look at a long-term basis, look back to 70 and 79 we have sharp selloffs in the s&p 500 and the ftse. actually the technicals are building up in a similar way to that. the problem is you don't always know what the reason for the selloff is. you can see something approaching. you know there is a train

coming. what you don't know is if it is going to stop in time. >> a after the break, you talk about the nasdaq. this is going to be interesting your views on that. here is a look what else is oming up on "on the move." sales of aheld. they feel the -- ahold. they feel the sales of a weaker dollar. can we call it a comeback? don't get ahead of yourself. h.p. shows growth after 12 quarters of falling sales. stay with us. we're "on the move". equities an inch higher after the hawkish reserve minutes. follow me on twitter at ferrotestify. "on the move" will be back in two.

>> welcome back. this is "on the move" live from london. we're streaming on everything. stock ime to bring you a

"on the move." a pretty rough first half earnings report. net profit down from a year ago. sales down 2.5%. the multimedia company topped things off by cutting their 2014 outlook. investors not liking that report. there is always something to blame, isn't there? here is caroline hyde. how bad were the numbers? >> they missed across the board. remember why we care about ahold? it is a big retailer. huge retailer. mainly a dutch one in the netherlands. think of brands such as stop and shop and giant food. it has its foothold over there. things are not looking to rosy.

operating profit down 15%. pressure on volumes, price investment as well. this is the problem for the company. they are having to just try and lure in a buyer when we have inflation at really significant lows. they are not able to boost the price of their goods and they have plenty of competition on their plate. they are offering discounts plenty trying to draw and lure the shopper in. they are spending big on turning around some of their u.s. shops. they have rolled out a total of 320 stores that have been improved in the united states. but they are not able at the moment to gain any sort of uptick in sales yet. they have cost savings but that is not enough to support the sales. sales down by 1.8% in the united states. even though we have the world cup that they thought would get the dutch spending in the netherlands, they said look, we're no uptick in dutch

supermarket channel either. generally it is a pretty dismal set of results. analysts expecting barclays -- >> cheer me up. any light at the end over the tunnel? >> they are talking optimistically. ou have to dig deep. online sales up almost 19% but not enough to give the shares any sort of boost this morning. off by 2.6%. investors don't seem to be that wooed by the fact that the sales will improve by the investments they are making. they are further developing their product range spending big to try to up their customer proposition. trend also start to turn around in the third quarter. many have set themselves for a pretty dismal set of numbers coming from ahold. the stock is up this morning.

it is worse than had been expected despite the world cup. at the moment it is just waiting for the u.s. consumer to start coming back. they are trying to meet potential vems over there. they lost share particularly in new england. they have their eye on market baskets. a new england heavy supermarket chain. it is interesting they are eying that one up. >> great work. still with me is securities chief investment strategist michael franklin. look at ahold. a bet on the u.s. exhumer. consumer, now a good time to bet on the consumer? >> it looks difficult. you have two impacts of course. tapering come off in october and interest rates probably won't go up until next year.

when they do start to move, you have a double whammy because the cost of capital goes up which is more expensive for people trying sell in the market and then swrow people have less disposable income. >> i was reading a great article and there was a great quote. no recovery or cycle had ever died in its sleep, murdered by the federal reserve. equities can carry on rising. the economy is resill yept. what is your view? error you shouldn't generalize on that point. you can have a strong market if the central bank is going up if the central bank is beyond the curve. there is a nasty rumor going around that the central bank is in a hole. this is actually quite nice and it is not a hole. >> great fly-fishing. >> fair enough. mostly great for the flies. no. you know, central banks are in a

difficult position. i think i made the comment here before that the markets are trying to second guess central banks and the central banks are trying second guess economy. it is difficult. they are just chasing each other around. >> how do you guess what they are doing? gave in us time contingency guidance. it was data contingency. put those both to bed. you know. now you're hearing dissenting voices at the fed. >> this is a problem with forward guidance. the central bankers think they are going the markets a favor by giving them as much information in context as possible. problem is this issue of slack. particularly a case in the u.k.. if you get that wrong, then the central bank is going react wrongly. if they are too soon, they are going choke off recovery. if they are too late, they are going to have to scramble to catch up. they are in a very difficult

position. it is back to the technicals i'm afraid. rf after this next report, you're going to stay with us. we're going to talk about tech now and specifically about infineon making a $3 billion move towards the u.s. germany's biggest chip maker will buy international rectifier. hans, what does infineon get out of this deal? >> they get a slice at silicon valley. they get real estate and all the cred innovation from that. they are getting a company that makes low cost, low powered chips. microprocessors. chips that go into everything from cars to computers to inside your home to regulate the temperature. as you look toward the futures especially with google's acquisition last year, there is going to be a move toward -- it is about having a foothold in

the states as well. he put it in real estate terms. it is very important for us to be in u.s. and close to highly innovative region of california. international rectifier does that. that is the c.e.o. of infineon. clearly he has been on the hunt for something since 2012 since he came into the company. both boards have approved it. $40 per share. that is a 51% premium. the stock was already up some 7% this morning. clearly it is going to go higher. jon? >> we're seeing a lot of consolidation in this particular sector. any job cuts planned on the back of this deal? >> yes. infineon has been very clear saying they think there are some synergies, efficiencies they say they can get. they are they have a 4% profitability operating margin. it is much higher than silicon valley and already they have the scope and scale to make some of

the chips that are being made in silicon valley. expect to see some manufacturing jobs leave the states and come to southern germany. >> john? >> thank you very much. still with me for his final thoughts is michael franklin. michael, when i was looking at the nasdaq when i got in this morning, when get near those kind of levels people get nostalgic for the wrong reasons about what is going to happen next. what is your sflupe >> apple, which you know, has moved up strongfully the last day or so. i toned focus much more on the s&p 500. nasdaq with move swrarnse the other two. for a host of different reasons. as we saw with the pharmaceuticals. if you look at the political intelligence we're building at a peak.

that is what the technicals are suggesting. sometimes the fundamentals don't mean much either. if you look at all the issues that are out there that have to be resolved. what is going to happen in iraq? >> what is going to happen in raq? is it a market issue smp >> it could be. if you heard that america and some of the other western allies were going to go back in there, go back to where we were a long time ago and no one fancies the prospect of going back to war effectively. that situation has got to be resoffed. whatever you think the outcome might be. similarly some of the other issues, you might think it is a local difficulty but there are longer reaching implications. russia, ukraine, europe. if russia decides to have a crack at europe, energy. where does that leave europe? fully enroute to recession.

implication the for a global -- general global activity is reduced as well. not good for the u.k.. you have to recognize that risk even if it doesn't happen. >> can you draw a line between what's happening in iraq and russia and the ukraine? both very serious. iraq very tragic. is that something more fundamental for the economy? >> for the global economy, you mean? russia, the economy there is slowing down. you know, they are obviously keen to keep oil supplies going and they probably wouldn't want to cut manager to europe on that basis. you know, putin has already -- is already out of line because of the annexation of crimea. the west has to do something bout that and punish him the sanctions work both ways. there are a lot of issues that have to be worked through. it jeopardizes the economic

recovery. if the u.s. goes bab the iraq, there is money going back in. you think about in afghanistan, the cost of going in there has now exceeded the cost of reparations after the second world war. >> final question going into the back half of this year, an extraordinary market where everything has moved in one direction. bonds higher, yields lower,ingities higher. pretty much everything on the planet higher. how can that continue? >> it is right. obviously with central banks pumping money the systems, that is not such a surprise. what is more difficult to zpwage if people are going to selleckities where are they going to puts their money? the bond market doesn't look that friendly. it is difficult. we're going to have more pressure on interest rates to bring them down. i know where i want to be. i want to be -- i'm happy to be in cash if it saves me from being in a falling market.

>> michael franklin. thank you very much. he doesn't sound bearish but when you put him against some of the bulls who are saying buy, buy, buy, he is sounding bearish. coming up, navy seals and high-ranking admirals. their in addition to build a warship. that is tricky. we step aboard later in the hour. ♪

>> welcome back to "on the

move." joining you live from the city of london. let's bring you up to speed with companies on the move this morning. profits beat estimates. foreign exchange gains have second quarter profit surge more than six-fold from a year ago. the c.e.o. has expanded the carrier to india, japan and much of southeast asia. growth is nabling more people there to fly. shares lower after a very rough first half. net profit down 52% from a year ago. sales down 2.5%. the multimedia company cut their 2014 outlook. a record settlement for bank of america could be anowsed as soon as today. that is according to people familiar with the deal. the bank will reportedly pay $17 billion. up next, after that rather

hawkish federal reserve set of minutes we go to jackson hole ahead of the u.s. central bank's meeting. we'll teel tell you what you need to watch ahead of janet yellen's said to be very dovish speech. we'll be back in two. ♪

>> welcome back to move. i'm jonathan ferro. europe's headquarters in london. here is a picture of the markets. equities keeping their head above water if you're looking at the ftse, lower by an inch. german p.m.i.'s, manufacturing in at 52.0. this is the preliminary reading for august. that's a beat. services comes in at a punchy 56.4. also a beat. xpecting 55.5. quick check of the euro for you.

i'll bring it up on my terminal now. if i can bring it up on my screen, that would be awesome. some good numbers out of germany. hat is impressive. german data pretty good this morning after that disappointing french data early this morning. if you were looking on the manufacturing side. manus cranny with a tricky touch screen and three stocks to watch. >> thanks. technology will not define me today. rio tinto missed on the p.m.i. listening to that german data that you just read, the question we have to ask is have we passed the dip in terms of confidence numbers? some of the indicators in germany were on the low side. rio at this particular timeo coming lower. the chinese purchasing data,

disappointed the p.m.i. iron ore at the lowest price on the commodity exchange. you're looking at 2014 lows for iron ore. big issue for rio. they have a presence across part of the north of europe along with hungary and belgium. they say it has been tough, the number two player in that area. advertising taxes in hungary add into their numbers. a real delivery in terms of what is going on with the media companies out there at the moment. this is the number two bank in eastern europe. they stay impact from sanctions is low. net income rose by 53%. russia they say is still a big butt. sls 8. 5 1

>> 46.5 for august. the lowest level in a year. chinese manufacturing fell more than analysts estimated. in august. hsbc came in at 50.3. if it is confirmed on september 1, it will be a three-month low. the latest minutes over the federal reserve show policy makers came close closer. some participants were increasingly uncomfortable with the fed's plan to keep rates low for a considerable time. many participants said they may have to raise rates sooner than anticipated. a touch hawkish. we're going to stay with the fed. the u.s. central bank holds its annual monetary policy in the mountains of wyoming today.

michael mckee got an invitation. he gives us an idea what investors expect to hear. a conference, research papers assigned, explained and discussed. the advent of q.e. changed all of that. for several years, ben bernanke used the fed chair's keynote speech to outline fed policies to come. we don't yet know what janet yellen will do. analysts say she is likely to split the difference. say that markets still need improvement without saying what the fed could or should do about it. she may update her dashboard. high levels of long-term unemployment and part-time work. permanent conditions or transitory? another key issue is what happens when central bank

policies around the world start to decouple. if the fed and bank of england start to raise rates next year while the e.c.b. and bank of japan continue with qu policies. yellen will be followed by draghi giving a luncheon here. he will talk about how bad he thinks conditions are in the 18-member eurozone and whether he thinks his will follow the fed in adopting q.e. policies and the japanese central blank discuss the latest on abenomics. this year it is mostly academics again in attendance. wall street economists not invited. >> that is the united states. let's return to today's data coming out of the eurozone. the aggregate reading is due at the top of the hour. we learned chinese manufacturing came in shorts for the month of august. we're talking about germany and france now.

good morning. >> good morning 3789 >> the data is mixed. germany is lower than the previous month but it is a beat. french data on the manufacturing side disappoints. services is better. you think things could firm up in the second half of this year? does that dats speak to that story? >> especially the german data is a lot stronger than i would have expected given the news flow out of eastern ukraine that ke have these sanctions now -- we have these sanction annoy and over indicators that investor confidence was terrible last week. this is a very resill yept robust reading. particularly for the economy which has evaded the russian impact, good news. this is a -- this is the third quarter is shaping up nicely for germany. >> last week, as you say some horrific data and the week before, with the factory orders as well. this week you see the german

data coming out better. is that good news, bad news? where does this leave with us the e.c.b.? >> i think the key here is to see that the soft data and the p.m.i.'s are part of the soft data. also for italy to some degree has been buoyant and strong and robust lately. the hard data wasn't at all. we had a very weak second quarter g.d.p. figure. you mentioned the industry orders. all of that was weak. for this data to make a difference, also the e.c.b. level, i think we'll have to see confirmation in hard data and that is going to take some time. i think for the time being the e.c.b. will be very dovish in the statement, prepare markets for more action potentially toward the end of the year, but of course they have just announced these extra measures in june and they want to see how these measures work through to the economy before they take further steps. >> everybody shapes up this debate as germany versus france.

the numbers look like france is on the cusp of recession. the question is will germany give them leniency? if the e.c.b. is going to more, draghi can forget about being political about more reforms. where is the incentive? >> i think you outlined very well the two debates that we have. one on the fiscal side between france and germany whether to have more investment programs. also juncker coming in as the e.u. commissioner. we'll see what happens on that side. the other is the euro, which is a very traditional french topic getting the euro down to boost exports. that is a traditional strategy. i think while paris may have some support in berlin on the fiscal side, i think berlin is not as tough on that side as it used to be. wrnk with the e.c.b. france is not going to make much progress.

clearly they will want to keep their independence. with all the criticism it faces in germany surrounding o.m.t. and potentially future q.e. programs i think they want to keep paris at arm's length here. >> what about the rest of -- i got back yesterday and i was struckly the fact they were august talking about eurozone exits. that debate is still happening. yields have come down significantly. does the reality of a sluggish economy in the likes of itly, greece, which just -- of italy, greece, which continues to be underperforming. does that mean the base comes back around sflrp it is interesting how one disappointing quarter of growth brings back feelings of wisconsin to. i think there has been tremendous progress in 2012. if you look at the swing in growth figures, especially the peripheral countries from 2012, when countries were shrinking at

6% per year and now they are roughly stable, pping i think there has been tremendous progress. we have seen reforms, product reforms, fiscal awl austerity and they are reaping the benefits. this is not a repeat of the euro crisis. the problems now are in the core. germany would take a -- this is volatility. i think the real problems are in france and italy because these are the countries that have not followed the eurozone crisis strategy. . >> the question for you is what is going to push the french over the line? why would they change if they have seen their borrowing costs drop week after week after week? where is the incentive to change? >> it is not going to come from a big market selloff as we have said in portugal and ireland. i think it will have to come from within france. the most likely thing that is going to happen is something

that happened in germany. unemployment continues to increase. and underperform the neighboring countries. it is raising the pressure on government to do something new and hopefully hollande will be schroeder has this moment and take onboard not just his own party but the grand coalition to get things moving. unfortunately it looks like that moment is sometime away. >> does france need no forget about these budget deficit targets altogether? >> i think they shouldn't abide to these target fwiss letter. it would be counterproductive. i don't think that massive fiscal stimulus now would change any of the long-term malaise that france is in. it needs reform.

it would get figures up in short-term but not the long-term. >> i want to talk to you about e.c.b. and policy in the second half of this year. they seem to be pinning their hopes on credit growth. that demand will pick up and supply will be there. what do you view? do you think there will be a strong pickup for that funding program? >> the timing is very important here. there may still be some uncertainty around the first allocation and the risk is that that if first pickup is low then the second one has some stigma attached to it and it will also be low. if you look around, i think there will be a significant uptick. i don't think it will be the $4 00 billion overall. >> final question. who blinks first? the e.c.b. on more measures, loosening or the germans on austerity?

>> i think the e.c.b. will be the one to blink first. but i do think that is underneath the radar the germans have already softened their stance as well. it is a drarbgs i would say. >> there -- it is a draw, i would say. >> there we go. thank you for joining us this morning. up next on "on the move," h.p. sales top estimates. is this the start of a long-awaited turnaround? we'll find out after the break. ♪

>> i'm jonathan ferro in london. this is "on the move." we're doing with talk about silicon valley's h.p. they got a boost from improving personal computer sales. is meg whitman's revamp starting to pay off here? >> maybe just tentative steps that we're starting to see her cost-cutting action, her slashing of jobs but also what we're seeing here is actually luck. this in the second quarter. the p.c. market is helped not only h.p. but also microsoft and intel and all the old gart and h.p. itself is one of silicon valley's old eths companies set up in 1939. 30% of sales are dominated with

the hardware really. we saw a 12% uptick because finally we're seeing businesses start to invest, particularly in the u.s. they are upgrading their p.c.'s. it might be largely thanks to microsoft. they have that software that no onger runs on computers. p.c.'s better than expected. what about the rest of the unit? hardly any growth, if not falling sales in those departments. they also have key focus on printing in particular. that is about a quarter of their sales. half of their sales on services. software. we're not seeing much growth there. resilience in p.c. sales. i think this is a short-term thing. >> what can she do to revamp growth then? if the only growth you have is in p.c. side, this is not where you want to put all of your eggs is it? >> also what she is saying about

eastern europe. russia and you scrain hitting sales a little bit. they are trying to get sexy and cooler and they are trying to develop new products. they have 3-d printers. get this. they have a powerful computer running financial models creating complex designs. they get really, really hot. in the data center. they are spending more money on cooling down their machinery than they are spending on the machinery to begin with. what does h.p. come up with? water. they are using a patented system to cool down the computer by using water. very riskry being close to the computer parts. if they can keep coming up with r & d like this, it can help. but they also have to get sexier, cooler. we talked about the video with ita ora and iggy azalea.

that is what is missing. that is why her losing out to cheaper asian rivals. lenovo. how do they compete and revamp? it is all about product. >> it costs money. ask dr. dre. germany's largest chip maker will buy u.s.-based international rectifier. for $3 billion in cash. it will be infineon's biggest acquisition to date and is expected to be complete by 2015. it gives them more capacity to deal with rising demand for chip use in cars and electronics. communities weigh block or dding the right service.

munich and dusseldorf are considering taking actions. they are saying uber drivers need a cab driver's license because they are driving to earn a profit. clearly they are not doing it for free. the owner of stop and shop stores in the u.s. said it lost shares in the states where it generated half of their sales. they are planning to generate more money from online sales adding pick-up points and offering delivery to a wider range of companies. "the pulse" is coming up. anna edwards is your host for today. >> thanks very much, jon. we'll continue the good will you have been doing in looking ahead to the jackson hole symposium. that gathering of global central bankers. invitation only. we'll look at how the guest list might look loo year and what they will tell us about the

conversation around labor markets. who better to take us through the look ahead and to react to some of the data we have. we're going look at all of that with ginie during the program. less than month until scotland votes on its future. a professor at cambridge will be here giving us his thoughts on what an independent scotland would look like what happened the economics would look like. i'm sure the currency will come up in that conversation. >> my invitation to jackson hole clearly got lost in the post. i don't know about yours. "on the move" is back in two. ♪

>> a self-made millionaire has spent the past decade building a boat undetectable by radar. there is no guarantee the ghost will sell. we took a tour of the vessel. >> i am the creator of the ghost boat. we came up with the name ghost because the boat is intended to have no radar signature at all. the biggest challenge of the u.s. navy today is how do you get in and operate denied access

areas. today we can't do it. that is what ghost can do. it can go into those areas and loiter for 30 days and leave without anybody knowing you were there. our philosophy has been that we money for rthe risk & d. that allows us more flexibility for use later on. we can't wait for the government to say we want this. you need to be developing products like this and bringing them to the government and saying look what we have. are you interested in this program? that's where we are now. this looks this way purely to reflect radar but it ends up looking cool. everybody that sees it says it looks like it is out of "star wars" "star trek." but it is all funkal. -- functional. very easy to drive. you have a set of gas-driven throt wilson jet engines and you

a steering joystick. that's all you to do. push on the throttles and move the joystick. when you demand boat to turn, the computers know exactly what they should be doing to turn the boat. you have surrounded the entire underwater structure in gas. we get about six or seven feet of clearance between bottom of the module and the top of the waves. so we can actually cut through waves without feeling them. now we're primarily focused today on the defense segments, international and domesticically. but this is a great opportunity for sport fishing boats, for jet skis, high-speedboats. this technology can be employed in all of these different product lines. >> that is what you call a -- equities about an hour into the session.

if you want to talk market, you can follow me on twitter. i'm at ferrotv. ♪

>> under pressure. china's growth stalls while data suggests germany can stand economic risks unless eurozone pmi data is breaking down. inutch retailer loses ground the u.s. and feels the pain of a weaker dollar. financial heavyweights have bwest. central bankers and financial chiefs gather in jackson hall as the fed symposium takes off. a warm welcome to "the pulse."